Iconic restaurant chain Adyar Ananda Bhavan looks to tap PE funds to raise ₹1,000-1,200 cr

Mumbai: Adyar Ananda Bhavan (A2B), an iconic restaurant chain, is looking to tap private equity (PE) funds to raise ₹1,000-1,200 crore by diluting about 35% stake, multiple people aware of the development told ET. The Chennai-based QSR brand, famous for southern cuisine, is eyeing a valuation of about ₹3,500 crore, they said.

Veda Corporate Advisors will advise A2B in its fundraising process, which is part of a drive to professionalise the family-run business, the people said. Feelers have been sent out to domestic and global funds, and an official process will be launched soon, they added.

When contacted, A2B cofounder KT Srinivasa Raja, as well as a Veda spokesperson, declined to comment.


A2B started in Adyar in 1979 and now has about 150 outlets across Tamil Nadu, Karnataka, Telangana and New Delhi, apart from another 10 in the US, the UK and Australia. It is also planning an initial public offering (IPO) in the next five years and would scale up to 400-500 domestic outlets, said the people cited.

Professionalising Family Business
A2B revenue was Rs 1,500 crore in FY24, with about Rs 100 crore Ebitda, said the people cited earlier.

This is the second time A2B is exploring a stake sale. In 2016, it engaged with PEs including Samara Capital, WestBridge Capital, Carlyle and KKR. However, the deal did not materialise. According to reports, the business was valued at Rs 1,800 crore in 2016.

"Professionalising the family-run businesses for future growth is one of the major reasons for bringing the private equity funds," said Kavil Ramachandran, senior adviser at Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business, Hyderabad.

Ingredients of Success

A2B is run by Raja and his brother KT Venkatesan, sons of founder KS Thirupathi Raja.

In 1979, the trio opened the first sweets and savouries shop in Washermanpet, Chennai, under the name Sri Ananda Bhavan. Since business thrived, a second outlet was set up in Adyar, and rebranded as Adyar Ananda Bhavan.

A2B entered the restaurant segment in 2005 to grow it into a Rs 1,500-crore business today, with 14,000 staff. It generates revenue of about Rs 150 crore from its packaged snacks.

Major competitor Saravana Bhavan has 30 outlets in India and 81 abroad, across 25 nations. Another QSR major, Sangeetha, has more than 30 outlets in Chennai and around 21 abroad, while Sree Annapoorna has 19 branches in Coimbatore.

Business PE-latter

In the recent past, several southern family-run businesses have raised PE funds to meet their expansion plans.

In 2019, Dindigul Thalappakatti Hotels, which sells the popular Thalappakatti biryani, sold a majority stake to CX Partners for Rs 260 crore. This helped the 60-year-old brand expand and it raised a second round of investment in 2021.

Last year, WestBridge Capital picked up a majority stake in 50-year-old Tamil Nadu-based fruits and vegetable retail chain KPN (Kovai Pazhamudir Nilayam) Farm Fresh, valuing it at Rs 800 crore.

PE funds are also keen to invest in family businesses, especially those run by second- or third-generation entrepreneurs, which are already in the growth phase, with wide market and growth opportunities, Ramachandran of ISB told ET. "In many cases, the family-run businesses are unable to grow after a certain point due to the lack of money and professional guidance, where PE funds can contribute in a big way," he said.

Haldiram's, India's largest family-run snacks business, is also looking to sell a controlling stake, at a valuation of up to Rs 70,000 crore. A consortium led by Blackstone is in talks with Haldiram's promoters for a buyout, ET reported in May.